Update from the Joint Administrators of Manganese Bronze Holdings

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The administrators have today met with staff to explain that, regrettably, there will be 156 redundancies with immediate effect.

Matthew Hammond, joint administrator and PwC partner, said:

“Regretfully, without financial support to overcome the Group’s operational issues we have had to make staff redundancies. While the steering box recall remains, there is a voluntary suspension on vehicle sales, and we are now concentrating all resources on testing the solution to the steering fault. We have retained sufficient numbers of staff across the dealership, head office and production network to address the operational, technical and financial circumstances that the business faces.”

In total 108 staff have been retained or laid off. The 12 that have been laid off have been sent home on partial pay and will be called back into work should vehicle production start up again.

Of the 176 employees based at the Group’s head office and manufacturing site in Coventry, 99 have been made redundant and of the 98 employees based at the dealerships in London, Manchester, Leeds, Edinburgh, Glasgow and Coventry, 57 have been made redundant.

The retained staff based in Coventry will continue to focus on finding a solution for the steering fault alongside head office resource to keep the business running. The remaining staff based in the dealerships across the UK will continue to service taxis and will be involved in the steering box refit once a solution has been found.

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Manganese Bronze Holding PLC Announces Administration

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Matthew Hammond, Tony Barrell, Ian Green and Mike Jervis were appointed joint administrators of Manganese Bronze Holdings plc, LTI Limited, MBH Services Limited and MBH Property Services Limited (“the Group”) on 30 October 2012.

The Group is the manufacturer and retailer of the iconic London taxi, sold in the UK and abroad. It provides a retail and maintenance service through its wholly-owned dealerships throughout the UK, under the trading name The London Taxi Company. It has a turnover of £75m and 277 employees in total including three overseas employees. 175 employees are based at the Group’s head office and manufacturing site located in Coventry with the remaining employees spread across dealerships in London, Manchester, Leeds, Edinburgh, Glasgow and Coventry.

The culmination of several issues led to the Group being placed into administration. The Group has been making losses for four years due to a combination of poor UK sales, supply chain issues, and high warranty costs. These issues were further impacted by the discovery of material accounting errors in the first half of 2012 which increased the extent of the Group’s losses. More recently, the discovery of a steering fault resulted in the recall of circa 400 vehicles and a suspension of sales which had an immediate detrimental impact on the Group’s cash flows.

Following a suspension of its shares earlier this month, the Group has been unable to secure sufficient funding. Without financial support to overcome these operational issues, the Group came to the conclusion that it could not continue to trade as a going concern. As a result the directors placed the Group into administration. LTI Limited is concentrating all its resources on fixing the steering fault. The administrators have entered into discussions with key stakeholders to secure funding to support the business through this period whilst the administrators seek a sale of the business and assets as a going concern

Matthew Hammond, joint administrator and PwC partner, said:

“Our immediate priority is to secure funding in order to explore the options rapidly developed by the Management team and key suppliers to resolve the steering box recall. We are reviewing the existing financial position to develop a range of options to rescue the business or alternatively dispose of it to an investor that can continue the business to a secure future for the iconic London Black Cab. We have immediately commenced discussions with an encouraging list of UK and International interested parties and would encourage any further interested parties to contact us as a matter of urgency.”

Steering Box Fault in TX4 Taxis / London Taxi Company in administration

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This notice is issued further to TPH Notices 17/12 and 19/12 regarding the manufacturer/VOSA recall and subsequent suspension by Transport for London (TfL) of the licences of late model TX4 taxis affected by a steering box fault. It also provides information related to the announcement on Monday 22 October that Manganese Bronze and the London Taxi Company would be entering administration.
Since the recall announcement, TfL has been in constant dialogue with the London Taxi Company (LTC) and the administrator to understand the technical nature of the recall, the steps that LTC are taking to identify and implement a solution and the impact of the decision to enter administration.
TfL’s priority is, and will remain, ensuring the safety of drivers, passengers and other road users and assisting drivers where possible affected by the recall.

The current position is as follows:
440 taxis in the UK are affected by the steering box fault and recall. Of these 316 are TfL licensed taxis.
A full list of the affected taxis as provided to TfL is attached as Annex A. This includes an additional 13 taxis which were not listed in TPH Notice 17/12 but which were subsequently found to have been affected by the recall.

The recall is due to a serious fault in the steering box and therefore the affected taxis must not be used under any circumstances.
While the recall has been described as “voluntary” this does not make it any less serious or imply that drivers/owners should not comply with the recall. The licence of every one of the 316 licensed taxis was immediately suspended by TfL and remain suspended at this time.
Where TfL identify any of the 316 affected taxis being used in any circumstances then the taxi vehicle licence plates will be removed immediately.

Only LTC have been given permission to temporarily license Euro IV taxis which have not been previously licensed in London, and these taxis are only for use by drivers directly affected by the TX4 recall.
Drivers and other taxi proprietors and garages are not permitted to license Euro III and Euro IV taxis which have not been previously licensed in London.
Any solution to the steering box fault and replacement must have the full approval of the vehicle manufacturer, LTC and VOSA – TfL will work with and support garages who believe they have a solution, however any solution proposed must have LTC and VOSA approval.

Work should not be carried out on taxis until any engineering solution has been appropriately tested and approval has been granted by LTC and VOSA and then authorised by TfL.
TfL has had regular contact with the administrators & LTC management and have expressed our concern at the delays in providing replacement taxis and the provision of inconsistent and/or lack of information to impacted drivers.
As well as being in constant dialogue with LTC, TfL has also contacted KPM who have assured us that they have a significant number of taxis in stock and have committed to assisting drivers affected by the recall any way they can.
At present there is no intention to relax the age-limits for taxis in London which are still in force. This decision will be kept under review as the situation develops.

TfL appreciates that taxi drivers and the trade in general are concerned and worried by recent events. We will endeavour to provide regular updates and inform you of any changes as and when they arise.
Further information and guidance visit the LTC website at london-taxis.co.uk, call the LTC Customer Support line on 02476 572000, contact TfL by emailing TPHEnquiries@tfl.gov.uk or contact your driver association.

Latest email update from LTC re: Steering Box Recall

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The Steering Box Recall was implemented because there was the potential for a sudden and unexpected loss of steering control to be experienced on specific vehicles.
To prevent any occurrence of this condition, The London Taxi Company states that you should immediately STOP using your vehicle.

We have been advised that there is a belief that the above statement is merely advisory. We can assure you, it is not.

To be clear:
· Please do not use your vehicle for ANY reason.
· ALL affected licensing authorities, including Transport for London, have suspended the licences of the affected vehicles.
· Do not put your career, yourself, passengers or the general public in needless danger.

STEERING BOX RECALL

Our objective continues to be to resolve the situation as quickly as possible for affected drivers.

We continue to work towards a solution that will, in due course, be validated by MIRA, VOSA and also Transport for London (TfL).

You are still our top priority; and you will continue to be so, should the company enter into an Administrative process.

Thank you again for your patience, understanding and loyalty during this difficult time.

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Addison lee attacks rival taxi apps

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Addison Lee, a pioneer of iPhone “taxi apps” has rounded on a raft of copycat services which have come onto the market, claiming they can’t be trusted.

The minicab company launched its own smartphone app for booking minicabs to coincide with the first iPhone in 2007 and was featured on the original adverts for Apple’s handset.
Peter Ingram, IT director at Addison Lee has taken a dim view of the dozens of taxi apps, such as Hailo, Uber and GetTaxi, that have rushed to enter the British market. “I’ve seen 26 apps relevant to black cabs and minicabs but none of them have a fleet. They’re just middlemen,” he said.

He argued that they can tell a user a cab is two minutes away but cannot lock the driver into accepting the fare. “When its raining, there’s people hailing cabs on every corner. The cabbie just pulls over for the fare and cancels the other booking. These apps don’t have control of that moment.”

Moving into the smartphone sector early has proved a success and Addison Lee expects to take £50 million in revenue from its iPhone app this year. It has already taken £33 million this year, compared to £23 million for the whole of 2011, with a quarter of all its bookings now made over an iPhone.
Mr Ingram said half of Addison Lee’s bookings come from iPhones on a Saturday night. “We see this as the future. In the next couple of years I can’t see any reason why we won’t get to 70 per cent.”

The app allows Addison Lee to lower its costs as it does not need to hire as many staff to take bookings manually.
Some of Silicon Valley’s biggest investors have backed the new generation of taxi apps but Mr Ingram remains unconcerned by the threat. “The Addison Lee app doesn’t look as sexy as the other, but it is functional,” he said.

The cab company is set to invest in producing a better version of its app for the Windows and Android operating systems but will spurn the new BlackBerry platform as it does not expect sufficient demand.
The company’s booking statistics provide a fascinating insight into how different smartphone owners use apps. Addison Lee is taking almost 6,500 bookings a day from iPhone customers compared to 1,000 for BlackBerry, 500 for Android and a paltry 20 from Windows.

Mr Ingram said it is willing to back Windows as Microsoft is working with the company on its development and he hopes that usage from Android will begin to pick up.

Source: The Times

Manganese Bronze Holdings PLC- Statement

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Manganese Bronze Holdings PLC (the “Group”), the manufacturer of the world famous London taxi, today announces that discussions with various parties to secure funding on acceptable terms to address the Group’s financial needs have proved unsuccessful. The Board has therefore concluded that the Group is no longer a going concern and has filed notice of intention to appoint administrators.

A speedy resolution of the product recall announced on 12 October 2012 relating to the discovery of a steering box fault remains the top priority for the Group and will continue to do so throughout the administration process.

The Board remains hopeful that the fundamental strengths of the company, the TX4 model and its global reputation will provide the platform for a successful business in the future.

A further announcement will be made in due course.

Taxi drivers braced for crash by Manganese Bronze

John Robins’ TX4 had been deemed unsafe by Manganese Bronze

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Transport chiefs in London are being urged to draw up a contingency plan in case the troubled taxi maker Manganese Bronze goes out of business.
Industry representatives are warning of a looming shortage of black cabs because of a financial crisis at the loss-making Manganese, which has halted sales of its TX4 taxis after a steering fault was discovered.
John Robins’ who’s Taxi has been affected Said ” I haven’t slept properly for three days” said taxi driver John Robins whose TX4 taxi has been deemed unsafe by Manganese Bronze
“I’m the only earner in my family at the moment-my wife looks after our children”
His taxi was only two weeks old when he got a phone call on Sunday.
“They told me in no uncertain terms to stop using the cab and that its licence had been suspended”
After much searching he found a taxi available to rent, on a temporary basis for £180 a week.
He wants Manganese Bronze to take back the TX4 entirely and to release him from a deal under which he is obliged to pay £135 a week for four years . It has declined to do so.
“They haven’t got a solution and they have not got the finances to sort this out”.
Boris Johnson, the Mayor of London, has agreed to relax temporarily tough emissions requirements for taxis so that black cabs used in other cities can be brought in on a temporary basis.
Manganese has recalled 400 vehicles across the country, including 316 cabs in the capital because of the defect. Dealerships have run out of replacement cars, leaving frustrated taxi drivers without a livelihood. At a recent industry liaison meeting, taxi drivers’ representatives asked Isabel Dedring, London’s Deputy Mayor for Transport, to suspend a rule that bans drivers in vehicles older than 15 years from plying their trade.

The rule, introduced last year, has already meant the withdrawal of 1,495 taxis from London’s streets and a further 994 are due to be retired by the end of the year. The capital has 25,000 taxis.
Darryl Cox, secretary of the London Cab Drivers’ Club, said that Ms Dedring had been urged to plan for a scenario of Manganese ceasing trading: “It’s a worst-case scenario. It’s a bit like the euro collapsing — everybody’s got an opinion but nobody really knows what would happen.”
Manganese’s shares have slumped by 75 per cent in a year and trading in the stock has been suspended. The company, which made a £3.6 million first-half loss, is in talks with Geely, its Chinese partner, in the hope of securing funds.
The problem with Manganese’s taxis lies in a steering box from a new Chinese supplier, introduced in April. There have been two recorded instances of steering suddenly becoming locked. Some taxi drivers, who are on hire-purchase deals, are trying to surrender their vehicles entirely on the ground that they are not fit for purpose — a conjection that Manganese is rejecting.
“We’re quite disgusted, really. Many of us knew about this steering problem in August,” Mr Cox said. “A lot of innocent people have been caught up in it.”
Most of London’s taxis are Manganese models. The only other manufacturer with a cab that fits the capital’s unique requirement for a tight, 25ft turning circle is Mercedes, which makes a six-seat minivan, the Vito, that costs £42,000.

Peter Da Costa, chief executive of Mercedes’ EcoCity Vehicles division, said: “We’re obviously concerned about drivers caught up in this and we’re helping them in any way we can.”
Rival taxi manufacturers have suggested that London is far too reliant on two suppliers and that the capital’s “conditions of fitness”, which set exacting standards for taxi specifications, should be relaxed.
Donald Pow, general manager of the Glasgow-based taxi maker Allied Vehicles, said that the capital’s rules were anachronistic. “There’s a lack of choice in the market. That choice is what drives innovation, price and quality. It’s ironic, given that the turning circle in London is such a bugbear, that it should be steering that’s caused this issue,” he said.
A Transport for London spokesman said: “We continue to closely monitor the situation.”

Source: The Times